COVID Bill has new regulations for selling on eBay in 2022. Sellers - Beware.

[coasternut]

I just read that starting in 2022,  eBay will start reporting to the IRS all sales totaling in a year of over $600.  It is in the new 2 trillion $$ spending bill.   Currently, it is $20,000.   Is that true?  Not sure what that has to do with helping get rid of COVID, but maybe it does in some way.   I'm sure someone will tell us.  

[masim5393]

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@coasternut wrote:

I just read that starting in 2022,  eBay will start reporting to the IRS all sales totaling in a year of over $600.  It is in the new 2 trillion $$ spending bill.   Currently, it is $20,000.   Is that true?  Not sure what that has to do with helping get rid of COVID, but maybe it does in some way.   I'm sure someone will tell us.  

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It has to do with people who haven't paid taxes owed and now the government needs that revenue to make up for all the stimulus checks they've given out.

[stephenmorgan]

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@magicjohnsonsvariety wrote:

Interesting read. Are accountants even prepared?

"Here's my 1099 from ebay, I have no receipts and no bookkeeping records"

In the past I have owned 2 real stores, however, the majority of Americans have never owned a real store and have absolutely no idea how to do bookkeeping... 

This could be the collapse of an entire "industry". I predict smaller sites like ecrater and ebid will most likely shut down. ebay may survive but it will be a huge hit to their revenue.

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[magicjohnsonsvariety]

Yea, I agree. 

Problem is the government/IRS is going into this not having any clear guidelines for the second hand, garage sale, antique resale industry that ebay has essentially created.

Forcing everyone who sells over $600 worth of their personal "merchandise" to perform the tasks of a business isn't logical or feasible...

Who doesn't sell at least $600 worth of used products each year...either at a yard sale, to a pawn shop or online. Stuff we no longer need.

True, people should report their income. However, this law basically turns nearly the entire population into "businesses", forcing everyone to act as if they are running a business. To keep books, receipts, records of expenses, etc.

However, the majority of Americans are not qualified, experienced bookkeepers...quite the opposite. My brother can't even balance a check book properly...many Americans fall into this category. 

Personally, the idea of writing receipts for my yard sale customers...seems a bit excessive. 

[stephenmorgan]

I agree with you completely.

If I make $20 Capital Gain on the sale of a Collectable I sold on-line, will I be able to write off a $8.00 loss I had because I sold a Garden Rake in my Yard Sale and just owe Taxes on $12.00?

My guess is the $8.00 loss on the Garden Rake will mean nothing.

This looks like an opportunity for employment with the IRS.  They will need more help keeping up with people who trying to show they did not make money. 

[dbfolks166mt]

     This is not going to impact just eBay but any third party financial processing entity. So you could end up getting a 1099 from eBay, one from PayPal, one from Venmo............  Had a friend who received some funds from a family member via PayPal and got a 1099 from Paypal for the fund transfer. 

[dbfolks166mt]

Having dealt with this doing my taxes this year, because of the Virginia law, I can tell you that accountants and more importantly the IRS organizations are not even prepared for this. When I asked the IRS several questions regarding the new law they didn't know how to answer and were unable to ascertain based on the language of the bill which was/is very vague and ambiguous. Given the mental capacity of our current federal politicians I suspect that the federal statute is not any clearer.  

[nobody*s_perfect]

They should have figured it out by now, since 9 states have already set lower thresholds for requiring 1099-K's.  Massachusetts and Vermont have had a $600 threshold since 2017.

[bbravo65]

...you are not kidding about receiving funds from PayPal transferring...aren't you...???

...my friends and family members have been sending funds through PP for years without getting any paperwork...since it's not business, how could PP decide that people have to involve with IRS...???

[dbfolks166mt]

You would think that would be the case but it is obviously not. 

[dbfolks166mt]

Apparently it does not matter if it's business or not unless it happens to be a transfer to family and/or friends Paypal has no way to determine why the funds were transferred.  For Virginia apparently even transfers to family and friends was not exempt since that was included in the 1099 I received from Paypal. 

[luckythewinner]

That's always what happens with new taxes.

The new 1099K threshold is not a "new tax". 

It would only appear that way to someone who cheats on their taxes. 

[jayjaspersgarage]

"

if the IRS audits you it could lead to other things and they can go back several years.  And yes they do audit  lower incomes

"

The statute of limitations is ten years!  

[jayjaspersgarage]

"When I take deductions to income for charitable contributions, I never use actual receipts."

Until you are audited, that is.   I have itemized my deductions since 1983 and always stack up the receipts during the year.  The only place my wife said doesn't give a receipt is her church.  She always deducted $2,500 per year until she had a stroke.  Heck, she did the taxes so I didn't ask.

[jayjaspersgarage]

"Had a friend who received some funds from a family member via PayPal and got a 1099 from Paypal for the fund transfer. "

Family members can gift each other something like $11,000 per year with no tax consequences.  Older people do it all the time at the holidays or birthdays to save their younger relatives the hassle of the next biggest rip off in history; inheritance tax.  I think the limit is higher than $11K now.  

[jayjaspersgarage]

"...my friends and family members have been sending funds through PP for years without getting any paperwork"

Don't worry, family members can gift up to a certain amount every year off the record.  Just be sure to never deposit more than $9,995. at one time.  The limit used to be $11,000.  I believe it is higher now.